JOHN HEALEY REPORTEDLY REJECTS CAPITAL GAINS TAX RISE

Chancellor John Healey has reportedly rejected calls to raise capital gains tax in the Budget on 28 October. Labour figures including Wes Streeting and Louise Haigh have backed an increase. Healey is concerned that higher rates could reduce Treasury receipts if taxpayers delay asset sales or move abroad, according to the account of his decision. He has described Britain’s position ahead of the Budget as “tough”. The government has ruled out a rise in the tax in the forthcoming Budget.

Capital gains tax applies to profits from selling assets, including property and shares. Basic-rate taxpayers pay 18% on taxable gains, while higher- and additional-rate taxpayers pay 24%. HM Revenue and Customs estimated that raising the higher rate by 10 percentage points would reduce receipts by £3.6 billion in 2028–29. Streeting has called capital gains tax a “wealth tax that works”. Haigh also discussed an increase during the summer, before Andy Burnham became Prime Minister.

Daniel Herring argued that raising the tax could prompt people to change when they sell assets. He cited figures showing that 32,000 taxpayers account for 80% of capital gains tax revenue and 5,000 account for half. The Tax Foundation’s International Tax Competitiveness Index placed the UK 30th among 38 OECD countries. Healey is expected to set out the government’s tax and spending plans in his 28 October statement.